Amazon is closing the gap with Flipkart in online smartphone sales

Flipkart is still ahead in online smartphone sales with 40% of the market in the quarter, although its share narrowed from 47.5% in DecemberRicha Maheshwari&Writankar Mukherjee | ET Bureau | October 01, 2016, 09:03 IST

Amazon is closing the gap with Flipkart in online smartphone sales, with the US giant gaining sizeable market share in the first half of this year and dislodging Snapdeal from second position, according to a research firm. Amazon, the world’s biggest online retailer, ended the April-June quarter with a cof 32%, data from Hong Kong-based Counterpoint Technology Market Research showed. That was a sharp gain from 21.5% at the end of December.

While Flipkart is still ahead in online smartphone sales with 40% of the market in the quarter, its share narrowed from 47.5% in December. Snapdeal commanded 18% from 22.3% at the end of 2015, Counterpoint Research said. However, both Flipkart and Snapdeal contested the researcher’s figures.

The three rivals will seek to improve their positions in the October-December quarter, with the festive season heralding the country’s biggest shopping opportunity, which accounts for almost half of the annual revenue generated by online sales. The marketplaces have beefed up their smartphone inventory by three to five times and have lined up exclusive launches for their sales from this weekend. Both Flipkart and Amazon opened bookings on Friday for Apple’s iPhone 7, which goes on sale on October 7.

Amazon is the fastest-growing among all online sites for smartphone sales, according to Counterpoint Research senior analyst Tarun Pathak. “The war among marketplaces for selling smartphones in India is mostly due to the fact that there has been a growing trend of electronic gadgets being sold online since 2014 and being a high-value category, smartphones give the much-needed volume and significant value torevenue,” he said.

The online market accounted for almost 33% of total smartphone sales in India in 2015, a share that’s expected to increase to 35% in 2016, according to Counterpoint. Flipkart asserted that it had a larger market share, while Snapdeal challenged the numbers and maintained it was still No. 2.

“We have a 60% share of the online smartphones market – that is only growing by the day,” Ajay Yadav, VP -Mobiles at Flipkart, said in an email in response to ET’s queries.

“Flipkart has launched majority of smartphones by marquee brands across price segments over the last few quarters. We had a cracker of sale for all these launches, which is only a testament to Flipkart’s strong hold in this segment.”

“We maintain our position in the smartphone market share,” Tony Navin, Senior VP – Partnerships and Strategic Initiatives at Snapdeal, said in an email, adding that the company had strengthened its share in the Rs 6,000 to Rs 10,000 price range with an exclusive range of products from Micromax, Samsung and other brands.

Citing April-June sales data published by International Data Corporation, Navin said, “Snapdeal has the biggest share of online sales for key Indian smartphone brands.”

Industry executives said Amazon’s growth was backed by exclusive deals, expansion of delivery destinations and winning over brands such as Motorola and Xiaomi, which were earlier exclusively on Flipkart.

Motorola will have a balancing play across leading marketplaces and it’s not as though its phones will be available only on one site, Motorola India country head Amit Boni said. “Our next launch will be on Flipkart,” he said.

Smartphone maker InFocus launched one flagship model on Amazon last month and is planning the second one now. “While we are selling through all top marketplaces, the recent focus on Amazon is due to their aggressive marketing, higher sales of premium models and the way they are driving customer traffic,” said InFocus country head Sachin Thapar.

Flipkart, which became the official online reseller for Apple iPhones, iPads and Macs earlier this month, started bookings on the site for the new iPhone 7, limited to Delhi, Mumbai and Bengaluru. The phones will be delivered on October 8, a day after sales begin in India.